Energy Policy in Brazil
Brazil is an immense country, covering nearly half of the continent of South America. It also has an extremely large and varied population, so it is not surprising that the country is the tenth largest energy consumer in the world and the largest energy consumer in South America. This extremely large amount of consumption is balanced by the fact that Brazil is also an important oil and gas producer in the region, including being the world’s second largest ethanol fuel producer.
Towards the end of the 1990s and the beginning of the twenty first century, the energy sector in Brazil underwent a market liberalization. The Petroleum Investment Law, which established a legal and regulatory framework and liberalized oil production, was adopted in the year 1997. However, the key objectives of the law were to create the groups called the National Council for Energy Policy or the CNPE and the National Agency of Petroleum, Natural Gas and Biofuels or the ANP. The creation of these groups helped to increase the use of natural gas and increase the amount of competition in the energy market in Brazil, as well as investments in the field of power generation. This marked the ending of the state monopoly over oil and gas exploration, and energy subsidies were reduced. On the other hand, the government did retain a monopoly over key energy complexes and was still in charge of administering the prices of certain energy products.
Today, the current government policies regarding energy are focused mainly on improving energy efficiency, both in industrial and residential sectors, and on increasing the use of renewable energy sources. In order to ensure sufficient energy investments that meet the rising need for electricity and fuel in Brazil, further restructuring of the energy sector will be a definite necessity.
Until 1997, the company Petroleo Brasileiro S.A., also known as Petrobras had a monopoly over oil production in Brazil. Today, however, there are more than fifty oil companies involved in oil exploration. Out of these fifty, Petrobras is still the only global oil producer, and it produced over two million barrels of oil each day. It also distributes other oil products and owns many oil tankers and oil refineries.
In the mid 1990s, reforms of the power sector in Brazil were launched. In 2004, a new regulatory framework was applied to the sector. Today, about sixty-six percent of distribution of electricity and twenty-eight percent of power generation is all owned by private companies. In 2004, it was estimated that there were sixty companies that were operating in power generation and another sixty in electricity in distribution of electricity.
Brazil is also the third largest producer of hydroelectricity in the world, following only China and Canada. In 2004, it was estimated that over eighty percent of Brazilian power production could be attributed to hydropower.
Because Brazil is such a large country with such a varied population, energy is an important issue for the Brazilian government to be constantly addressing. Efficiency and conservation of limited resources are all issues that must be considered as they have an immense impact upon lifestyle in Brazil.